Government impact on labor force

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There have been a few stories in the Wall Street Journal over the past week or so that are worth thinking about.

Yesterday's paper had an article about the anticipated growth in federal prisoners as a result of Attorney General Session's proposed policies. Last week's WSJ, however, had an article about how Maine's Governor LePage was commuting sentences in an effort to expand the labor force for businesses in his state.

LePage is not exactly a liberal dude.

How is it that what is considered a problem at the federal level is not perceived the same way down on mainstreet? Even Louisiana (which imprisons more residents per capita than any other state) just approved an overhaul of prison sentencing in order to reduce incarceration rates.

According to WSJ share prices for the two biggest private prison companies in America, Geo Group & CoreCivic have roughly doubled since the election.

Would we be better off hiring these criminals and training them to build cabinets or locking them up for low level offenses?

Another interesting WSJ story had to do with privatizing air traffic control.

The legislators from rural locations are a bit concerned about how this would effect their constituents. They are suspicious that the invisible hand of the marketplace would not want to make investments in low traffic airports.

Who is going to fund air traffic control for the hinterlands if the profit makers won't step up? Does this mean all the profitable jobs go to private industry and the taxpayers only get the ones that don't pencil out? This sounds like the new/old banking industry model: Privatize profits and socialize risk.

The Grand Coulee Dam started out as private/public partnership. The profit makers, however, only wanted the cost effective portion for themselves. Their proposal was for a 290 foot dam that was big enough to generate electricity for resale.

President Roosevelt got involved and the dam instead was built to 550 high. As a result of government investment the entire Columbia Basin also got irrigation. This government investment was a tremendous boon for rural areas. Without it we would have a lot smaller (albeit fiercely independent) agricultural community in SE Washington.

So Pat, do you think we should privatize air traffic control? What do you think will happen to the low traffic rural airports if we do?

The airlines have been largely decontrolled over recent years. Do you think air travel has become better or worse for this.

More near and dear to my heart has been the de-regulation of hard liquor in my home state. Everybody said that privatizing this would be an improvement. All I noticed is that a good bottle of bourbon was cheaper in the state run liquor store than on my grocery shelf.

Your price about price discovery is well taken. Churches are similarly immune from the invisible hand of the marketplace. They don't have to pay property taxes because they ostensibly provide some public good that would otherwise have to be provided by government.

We can't even measure how cost effective their contribution is because we don't even put a valuation on their property. Should churches be taxed like any other business? Is the lack of taxation a welfare benefit to the congregants similar to a welfare benefit to someone who sits on the sofa all day watching TV?

I think we tend to cherry pick our examples of what is good and what is bad. This is much like private industry will soon cherry pick which regions get to have airports and which do not.

It's going to be a long time(never) before we see UBER staffing rural airports.

We made the decision to publicly invest in our airport system for the same reason we decided to build a taller dam at Grand Coulee. Sometimes government simply does things better than the invisible hand of the marketplace.

"It's going to be a long time(never) before we see UBER staffing rural airports."

Seems to work fine in Alaska.

Uber type staffing works fine for a bush pilot system. These pilots navigate their own planes onto the landing strip using visual controls. If there was more than one airplane that needed to share the same landing strip an air traffic controller would be real handy. Private industry is not going to staff the marginally profitable airport hubs.

"We will soon see a single payer health care system."

Healthcare, as President Trump is learning, is hard. It was extremely easy for the Republicans to vote 80 times to repeal ObamaCare when they knew that Obama would veto it. Using live ammunition, however, is a whole lot spookier. The reason the Republican controlled House, Senate & Executive branch can't get a health care law passed is because they know their constituents will also start using live ammunition if they do. Is a lot easier to posture in front of TV camera than explain to constituents back home why they no longer have health care.

The reason we don't have a single payer system is because the insurance companies won't let it happen. The reason your healthcare is so expensive and the coverage so poor is because the insurance companies have to get between you and your doctor.

My doctor shares a clinic with one other generalist like himself. There are five people all total in this business. Himself, his partner, an office girl that makes appointments and handles general office tasks. The other two women only exist to interface with insurance companies to see if something will be covered or to get paid for services delivered. In this office 40% of the payroll is just negotiating with the insurance companies.

I can understand why healthy young people object to mandates. I can also understand why people in hell want ice water. The whole insurance business model is predicated on having a certain number of healthy people paying in to cover that portion of people who consume a lot more service than they pay for. The only way to get rid of the mandate is to get rid of insurance.

Or else go to a single payer system like every other country in the world with better health outcomes has.

Cabmaker, my wife quit her job as a nurse and works for me now. I have a good understanding of how the healthcare system works. How do you say that 40% of the place your doctor works is tied up in dealing with the insurance companies? Do they get paid as much as doctors? No they do not. Their purpose (and the reason that there is two of them)is to milk the insurance company and you for as much money as they can. That's one of the problems with healthcare today. How many docs take Medicaid? None in my area. Why, because they do not pay. The other end is docs ripping people off with bull$hit charges. The system is broke from both ends. We are all screwed.

Congratulations on getting your wife to come work with you. That sounds really great.

My wife too was very familiar with the health care system, albeit from the other side of the table.

Before she died she was one of those people who consumed far more benefit than she ever paid in. She was a walking pre-existing condition from about age 15 to age 60. If she wasn't suffering from one malady she was suffering from another. It's hard to fake Crohns disease. Harder yet to fake cancer.

When we were still dating she had some kind of weird disease on her foot. She was on crutches one week for each of three months while the doctors did everything they could to keep from exceeding what the insurance companies thought was cost-effective treatment. At one time the hospital told her to try putting a teabag between her toes.

Eventually they had no choice so brought in a specialist. He took one look at her foot and said he didn't scrape the bone that afternoon they would have to amputate her foot the next day. All of this misery because she was cutting into the insurance company's profits.

As a for profit industry I certainly understand the need for the insurance company to make a profit. What I don't quite understand is why we need a for-profit entity that exists merely to process payments to the hospital.

The insurance companies don't exactly provide any actual services. They don't discover new medicines. They don't check your blood pressure. They perform surgery or diagnostic checkups They just collect your money and pay the hospital.
In lean parlance the insurance companies provide nothing that adds value to the transaction.

I am sure your wife thought very hard about leaving her career and training behind to come work with you. A lot of people would really love to get a different job but they simply cannot afford to walk away from the medical benefits. Do you think she might have come to work with you sooner if employer-provided insurance was not a consideration?

There is nothing that keeps a single payer system from incentivizing good medicine. The incentives should go to the health care providers not the shareholders of non-value added entities.

PS: For what it is worth, I personally consume about 20 minutes a year worth of health services not including blood work twice a year and a prescription for blood pressure medicine. For this I pay close to $1500 EVERY month.

Hong Kong seems to have the kind of health care system I would like to see in our country.

If, as a nation, we agree we all want great health care what we need to do is pay health care people really well. This will attract the best and brightest people.

If the burden of health care was not an employment based benefit businesses would need to compete harder for the best people and businesses would have more capital to reinvest. This would create better businesses.

The primary reason most innovation comes from small business is because that's the only arena left for them to play in. It is hard for small business to compete with large corporations to attract talent because large corporations simply have more clout with insurance companies. Level the playing field and even the large companies would have to become better employers to compete small business.

The reason for health insurance being part of a workers salary comes from the 1940s.
Because the government had price and wage controls on workers during the 40s.

The only way employers could attract help was through offering them healthcare.

The key on this subject is the market and very little control from the government.

The healthcare world would look a lot different if LBJ didn't meddle in the healthcare arena. For one entitlements would not be nearly as big a problem. And the cost of health care and drugs wouldn't be nearly as high.

Prices of things constantly change. A few years ago oil was $100 per barrel, today it is at $46 per barrel.

Consider the price of housing in 2009.

Point is that the price of things constantly changes,

The market is constantly determining the value of things, everyone wants to get a better value for their purchases.

At one time Madoff had a lot people's trust, Enron the same, Detroit the same as it was the center of auto manufacturing.

Today Madoff is in jail, Enron is dead, Detroit is also dead.

Most of the trouble in Detroit was because it was cheaper to manufacturer elsewhere. The government had invested a lot in the pensions and salary of the city workers in Detroit, which requires higher taxes. Manufacturing went elsewhere. The city of Detroit had a high overhead with their tax base leaving.

There was urban flight from Detroit for normal reasons and then years of corrupt government added to the problem.

Michigan is thriving. There is lots of manufacturing here. There is still a good amount of manufacturing in Detroit for that matter.

I think Detroit was headed down mostly from corrupt inept government.
I also believe it is coming back. It is a beautiful riverfront city there is no reason for it to be in the state it is in. The private sector will be the ones that bring it back.

The only thing insurance companies provide to health care is cost. They distort the very idea of health CARE. At one time I was opposed to government "one provider" healthcare. But I see it as a better solution than what we currently have. The question is, will the insurance industry have enough $ to buy enough politicians to prevent it from happening?

Progress towards Single Payer Health Care may be slow but I think it is inevitable. Read about how HongKong handles health care in the link Pat Gilbert provided. For them healthcare is perceived as a right rather than a privilege. The ironical part is that not only is every citizen covered but they accomplish this for a great deal less than we spend in our country. What is not to like about getting more health care for fewer dollars? The knee-jerk individualists concerns should be assuaged when they learn that even in an area of socialized medicine there is also a robust concierge based medicine available.

When Paul Ryan becomes President (Mueller will discover that Pence, as chairman of transition committee, knew about Mike Flynn all along and was just the fall guy for administration) he will try to protect the insurance companies but it won't work.

Another consideration is that the Supreme Court is soon ruling on gerrymandering legislative districts based on political partisanship.

The argument is that redistricting to protect incumbent politicians is unconstitutional. It supposedly disenfranchises voters by apportioning representation along party lines. In Wisconsin, for example, where Republicans got just 48.6 percent of statewide vote they still captured 69-30 seat advantage in their General Assembly.

To be sure, both democrats and republicans are guilty of this. Step 1 is to eliminate gerrymandering. Step 2 would be to introduce term limits.

Government will look a lot different without gerrymandering and with term limits. The first thing we will see is a marked reduction in government by lobbyists.

Fix these two things then punish anybody who assisted the Russians to influence our election. Now you got democracy that everybody can support.

Is interesting what you said about the origins of employer based health insurance. As I understand it wage rates were controlled during WW2 so the only mechanism business had to differentiate itself was with benefits like health insurance.

Was this the basis for employer based health insurance being tax free?

France has for a long time also controlled conditions of employment. The election of Macron by wide margins would seem to suggest this sentiment is changing. The elections in Britain too maybe reflect a reconsideration of the merits of Brexit. How long do you think it will for Trump supporters to come around?

France has been socialist for a long time, they believe in that sort of government. But that is also why the emigrants go to France, because they have so much largess. Which is also why they have a thriving black market, IOW people can work for cash and still collect the largess.

The British came around when they voted for Brexit just like the Americans came around when they voted for Trump.

The EU is a bureaucratic mess and terrible for trade. The primary problem as I understand it is that unlike the US the citizens cannot vote with their feet, creating competition between the countries like their is competition between the states.

IMO the only reason the EU has not dissolved already is that the individual countries are afraid their currency would plummet, like the pound has.

Britain will be fine, the primary driver of the economy is demographics, theirs are pretty good. OTOH the rest of Europe is getting old. From what I understand Britain also does not have the drug problem the US has with their prime age work force.

You filter everything you read through a filter. That is not how you arrive at the facts and a scientific/effective viewpoint.

One problem with healthcare and health insurance is nobody know or cares how much anything costs. Yeah they know premiums are up but have no idea what they are paying for services, because "its covered by insurance". You take your kid to the doc because they turned an ankle at soccer and want to know if its broken, he looks at it and he knows its not but orders an xray, because "insurance will cover it" you don't care how much it will cost because"iwci". He looks at it confirms its not broken and gives you an ankle brace because "iwci". 6 months later you get a bill break down of what insurance paid on it and find out the xray was $750 bucks and the ankle brace thats l exactly the same as the one at Walmart for $9.99 cost $84. Your busy running kids to soccer.so so you dont question or complain because "iwci". Then next year you cant figure out why your premium went up.
Government involvement is the another issue. Just like in a cabinet shop, you cannot add steps and complicate the process and get lower costs. Its not possible. Single payer is a pipe.dream. Ive been to the dmv, I see how they handle my taxes, and I know the service i get at the post office. I have Kaiser, I can set an appt. Online, check in and see my doc without waiting and email him later if I have questions. I have never had a govt agency come close.to that kind of service.

Kaiser Permanente is some how able to a create a system where you and your family are able to "set an appointment online, check in and see your doctor without waiting and email him if you have further questions."

Kaiser Permanente is a non-profit organization.

Why do you think this quality of service could not be provided by a single payer health system?

Put another way, what positive things do you think FOR-PROFIT insurance companies contribute to the health care experience?

"Non Profit" is how they are set up as a corporation. All that means is they don't distribute profits to the shareholders. They still haveto compete in the market and still have to be run in the black. Just like any other non govt organization, if the continually run in the red the at some point will have to cease to exist.
Govt organizations are usually competition free and awarded an anual budget to work within. Even when it doesn't work, it becomes a sacred cow and it can never be taken behindnthe barn and shot, we just throw more money at it. Look at the VA healthcare system. What was it 5 years ago that all the waste fraud and abuse was shown to the public, those in charge held press conferences and promised all the change and what happened?
Competition improves the game, eliminating it and going to single payer won't fix it only make it worse.

Since a politician's job is to get re-elected, they will do what ever it takes. Hospitals/healthcare here is totally out of control. They can charge outlandish prices to one person and a lot less to the next. Your insurance company will pay 1/2 of what you as an individual will pay. If you are on welfare you get unlimited coverage, no cost to you.

When I went to live in London, I was interested to see how their health care system worked out. Not perfect but not horrible either. Most people there support it. There are abuses, it's always about $!

I'm on Medicare now, older than dirt! My last year on private insurance cost me $25,000 with a $10,000 deductible. Almost double what it had been.

Anytime the government limits or protects and industry, the costs WILL go up... if government limited the amount of cabmakers in a market for example, do you think it would be hard to figure out what the "competition", of any, charges and keep escalating the price because there's no competition or innovation going on to put pressure on pricing?

Look at the areas of the country under Obamacare where there are limited to one provider... even though they would have access to a LARGER base, what has happened to the prices in those areas? The prices/deductibles have astronomically INCREASED...

In contrast, look at auto, life, disability insurance where they HAVE to compete to get the business... you not only find cheaper rates but more services added to get the business... same with the phone industry (i.e. - cheaper cost, better products, more services)... but in contrast, look at the electric companies who are government protected monopolies in most areas of the country and you DO NOT find rates going down, but up... coincidence?

So is it really ANY surprise that those companies/industries that are protected / subsidized by the government and insulated from competition just so happen to be the most expensive and do not reduce their rates? As opposed to those that are subject to actual competition which end up providing more products/services at a reduced cost...

The big black hole of government is not the answer... all that does is do what you see now across many facets of life that government was supposed to fix... unaccountability, a beast that can NEVER be filled, bureaucracy, farther distance between you and your doctor, someone else deciding for you what insurance you will have, etc....

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